Insurance preferences of smallholders : results from an adaptive conjoint analysis in Northern Vietnam

Livestock plays a pivotal role for smallholder production systems in mountainous Northern Vietnam. Poor rural farm households are vulnerable and their livelihood systems are often so fragile and finely-balanced that a small misfortune can destabilize the households for many years. Economic risks, especially loss of livestock, are one of the major reasons for slipping into poverty. Normally, insurance systems could step in here. In developing countries however, insurance markets are usually underdeveloped. Empirical research reveals that raising livestock and selling it in case of a livelihood emergency is a particularly popular risk management strategy. Based on the results of a computer-based Adaptive Conjoint Analysis (ACA) with 155 responding households of different ethnic minority groups in Son La and Bac Kan provinces of Northern Vietnam, this article examines insurance preferences of rural farm households. In general, smallholders are very interested in livestock insurance. The ‘insured animal’ is the most important attribute for all respondents and the buffalo is the highest valued animal. However, the critical issue is how to design the insurance package. It is argued that the provision of adapted livestock insurance could help decreasing household vulnerability by a forward looking risk management strategy. Insurance preferences of smallholders are presented and policy recommendations are given to improve the overall situation of vulnerable households in mountainous Northern Vietnam.Risk management, livestock insurance, adaptive conjoint analysis (ACA), Vietnam, Risk and Uncertainty,

Social capital and rural development: literature review and current state of the art

Social capital has been recently held up as a conceptual framework to build a bridge between the diverse disciplines involved in rural development. However, despite its potential and the impressively rapid take-up of the concept by the community of development professionals, it remains an elusive construct. No definition is yet generally accepted and many definitions are in use. Recently, social capital in the form of social networks has gained much attention in rural development theory and empirical research. But social networks or structural components of social capital are a largely missing dimension in income and poverty analysis. Moreover, most research on social capital assumes that it is a uniform entity. Therefore, the effects of different forms of social capital on household outcome are rarely investigated. The objective of this discussion paper is to make the concept of social capital more tangible for empirical research in the area of rural development and to bring more structure into the conceptual framework of social capital. On the basis of an extensive literature review, this work proposes a lean and clear definition of social capital: Social capital is conceived as networks plus resources, (e.g. credit, information). Moreover, social capital is assumed to be not a homogeneous entity. Hence, it is necessary to distinguish different forms of social capital. For analytical purposes, the separation into so-called bonding and bridging capital seems to be most appealing. These two forms of social capital can be operationalized as function of an agent's so-called weak ties (e.g. acquaintances) and so-called strong ties (e.g. close relatives). -- G E R M A N V E R S I O N: Sozialkapital hat innerhalb der letzten zwei Jahrzehnte als interdisziplinäres Konzept eine enorme Bedeutung sowohl in der Wissenschaft als auch in der praktischen ländlichen Entwicklung erlangt. Trotz eines ‚Booms’ an wissenschaftlichen und nicht wissenschaftlichen Arbeiten bleibt das Konzept wenig greifbar. Bisher konnte sich die wissenschaftliche Gemeinde auf keine allgemeingültige Definition einigen. Sehr unterschiedliche und zum Teil sehr umfassende Definitionen sind in Gebrauch. Neuere Arbeiten tendieren allerdings dazu, Sozialkapital enger zu definieren und Netzwerke in den Vordergrund zu stellen. Nichtsdestotrotz werden strukturelle Komponenten von Sozialkapital oder Netzwerken nur selten in Einkommens- und Armutsanalysen einbezogen. Es wird auch noch oft unterstellt, dass Sozialkapital eine homogene Ressource ist. Deshalb werden dessen unterschiedlichen Ausprägungen noch seltener untersucht. Das Hauptziel dieses Diskussionspapiers ist es, einen geeigneten Ansatz für die empirische Forschung im Bereich ländlicher Entwicklung, basierend auf dem Netzwerkansatz, herauszuarbeiten. Basierend auf einer intensiven Literaturrecherche empfiehlt das Papier eine klare und einfache Definition von Sozialkapital. Sozialkapital wird als Netzwerk plus Ressourcen definiert. Unterschiedliche Formen von Sozialkapital (‚Bonding’ und ‚Bridging’) werden über die Stärke der Beziehung der Netzwerkteilnehmer bestimmt.Social capital,individual social capital,measuring social capital,ego-network,social networks

Media supported communication in agricultural extension and participatory rural development in Northern Thailand

The inhabitants of Northern Thailand, Thais as well as the members of the different ethnic groups, the so-called hill tribes, face a variety of very complex problems that range from natural resources conflicts via human rights issues to health problems. All in all, those issues constitute the initial point of departure for every extension, development and research activity, regardless of whether carried out by governmental, non-governmental organizations and/or other agencies. In order to analyze the current extension situation in Northern Thailand, field research was carried out in collaboration with different governmental and non-governmental organizations. Insights were gained into major areas of operation as well as currently used extension methods and media (especially picture supported communication tools) that are used in extension and rural development work, particularly when the target group is illiterate. Three organizations were observed in more detail and will serve as case studies. The paper presents Methods and Media Used by Different Organizations as well as major Criteria for Using Media in Extension and Development Work. Furthermore, the Application of Criteria for Different Methods and Media will provide the basis for the discussion of major potentials and limitations of currently used media in comparison to the Flannelgraph method, which was chosen as a major methodological tool of reference. In summary, it appears that the extension situation in Northern Thailand is too heterogeneous to identify the one ?right? extension approach. The use of media and the choice of extension methods depend on specific financial, logistic, methodological and cultural criteria as well as further issues, such as infrastructure, target group and the costs of the respective tool. In order to increase the potential and decrease the limitations of the currently used methods, the organizations have to concentrate on a better use of the already existing means as well as the improvement of those factors that are not fully used at the moment

Risk management networks of ethnic minorities in Viet Nam

The utilization of informal social networks is an important risk management strategy of vulnerable households in South-East Asia. To gain insight on this issue, a social network analysis (SNA) was implemented to assess risk management networks of ethnic minority farm households in the northern uplands of Viet Nam. The results from the analysis suggest that kinship relations and the level of wealth play an essential role in enabling basic network services to function. This paper also points out that effective networks require investments to fulfil the requested mutual obligations and that subsequently, social networks among poor farmers are relatively limited. The findings of the analysis show, not surprisingly, that networks cannot completely buffer severe shocks. Consequently, policy measures to reduce the costs of investing in social capital of poor farmers as well as improved access to appropriate social security systems are essential. These findings are applicable to other upland areas of South-East Asia.-

Insurance preferences of smallholders : results from an adaptive conjoint analysis in Northern Vietnam

Livestock plays a pivotal role for smallholder production systems in mountainous Northern Vietnam. Poor rural farm households are vulnerable and their livelihood systems are often so fragile and finely-balanced that a small misfortune can destabilize the households for many years. Economic risks, especially loss of livestock, are one of the major reasons for slipping into poverty. Normally, insurance systems could step in here. In developing countries however, insurance markets are usually underdeveloped. Empirical research reveals that raising livestock and selling it in case of a livelihood emergency is a particularly popular risk management strategy. Based on the results of a computer-based Adaptive Conjoint Analysis (ACA) with 155 responding households of different ethnic minority groups in Son La and Bac Kan provinces of Northern Vietnam, this article examines insurance preferences of rural farm households. In general, smallholders are very interested in livestock insurance. The ?insured animal? is the most important attribute for all respondents and the buffalo is the highest valued animal. However, the critical issue is how to design the insurance package. It is argued that the provision of adapted livestock insurance could help decreasing household vulnerability by a forward looking risk management strategy. Insurance preferences of smallholders are presented and policy recommendations are given to improve the overall situation of vulnerable households in mountainous Northern Vietnam

Rho AI – Leveraging artificial intelligence to address climate change : financing, implementation and ethics

The case focusses on Rho AI, a data science firm, and its attempt to leverage artificial intelligence to encourage environmental, social and governance investments to limit the impact of climate change. Rho AI’s proposed open-source artificial intelligence tool integrates automated web scraping technology and machine learning with natural language processing. The aim of the tool is to enable investors to evaluate the climate impact of companies and to use this evaluation as a basis for making investments in companies. The case study allows for students to gain an insight into some of the strategic choices that need to be considered when developing an artificial intelligence–based tool. Students will be able to explore the role of ethics in decision-making related to artificial intelligence, while familiarising themselves with key technical terminology and possible business models. The case encourages students to see beyond the technical granularities and to consider the multi-faceted, wider corporate and societal issues and priorities. This case contributes to students recognising that business is not conducted in a vacuum and enhances students’ understanding of the role of business in society during new developments triggered by digital technology

Constraints and potential of livestock insurance schemes: a case study from Vietnam

Livelihood systems of poor rural households are often so fragile that a small misfortune can destabilize households for years. Strategies for coping with risk include informal mutual aid agreements and/or formal microinsurance schemes. In developing countries, insurance markets are usually underdeveloped.Nevertheless, if the development path is supported by strong structures and institutions, anonymous markets will, over time, replace informal insurance networks as they are more efficient. In Vietnam, livestock is an important household income source and has additional non-economic functions in the households. For a long time, rural financial institutions in Vietnam financed only a small array of agricultural investments, but these frequently included livestock purchase. The absence of off-farm investment possibilities further promotes investment in livestock production. Failure of an investment, especially when loan-funded, can leave a household in an extremely vulnerable position. Livestock death is considered to be a major factor contributing to poverty. Farmers using credit to purchase livestock face two risks at once: (1) loss of the livestock due tovdisease and subsequently (2) failure of investment. Farmers would like to reduce the uncertainty, but a broad-based livestock insurance scheme does not exist in Vietnam. There are only a few formal and semi-formal schemes with very limited outreach. Thus, access to formal insurance is almost non-existent, and farm households have to rely mainly on informal mutual aid schemes within their social networks to reduce their risks. The objective of this paper is to contribute to the discussion on the general feasibility of a livestock insurance scheme in Vietnam. In this context, the demand for and supply of livestock insurance schemes is discussed. Quantitative (N=322) and qualitative data collection took place between 2001 and 2004. The quantitative data comprise cross-sectional household-level data from three different districts in Northern Vietnam. Four different types of insurance providers were selected for analyzing the supply side: 1. Insurance tied to credit within a state-owned company; 2. Insurance tied to credit within a development project; 3. A state-owned insurance company (which collapsed); 4. A private insurance company. By selecting these different insurance providers, the range of livestock insurance types offered in Vietnam was covered. The main result is that provision of sustainable livestock insurance is hampered principally by unreliable data on livestock mortality and by premia that are set politically at a low evel

Linkages between poverty and sustainable agricultural and rural development in the uplands of Southeast Asia

Most of the upland areas of Southeast Asia are characterized by insufficient infrastructure, low productivity in smallholder crop and animal production, mounting environmental problems such as soil and forest degradation and loss of biodiversity, increasing population pressure, and widespread poverty, particular in rural areas. While some upland areas in South East Asia have been experiencing considerable progress during the past twenty years, others have stagnated or even declined with respect to economic, social and environmental objectives of development. The purpose of the paper is to describe major trends regarding sustainable development in the upland areas of selected countries in South East Asia, and review explanatory approaches for the observed trends based on case studies from Cambodia, Laos, Thailand, Vietnam, and Indonesia. The conceptual framework for this paper builds on the critical triangle of sustainable rural development. Here, equity or poverty alleviation, economic growth, and the protection of the environment are the three major policy objectives. We further distinguish three explanatory approaches for land use change and agricultural and rural development. Apart from the market approach and the population approach, we suggest that future studies should focus more on governance issues as a major driving force of land use change. The governance approach appears particularly relevant for upland areas which are often politically and institutionally marginalized. The paper begins with a review of definitions of sustainability, and proceeds with a conceptual analysis of the two-way linkages between poverty and the environment, and poverty and economic growth in rural areas. This is followed by empirical findings from research on agriculture and forestry as the major land uses in upland areas of selected South East Asian countries. Based on the results of different case studies from Cambodia, Laos, Vietnam and Indonesia, we seek to contrast stories of relative success with those of failure. The paper concludes with implications for rural and agricultural development policies, and suggests future areas of research

Vulnerability and risk management of rural farm households in Northern Vietnam

Despite the achievements of the ?doi moi? reform process, which was launched in 1986, Vietnam is still one of the poorest countries in the world, with 28.9 per cent of the total population (85 million in 2007) living below the national poverty line (UNDP 2007). Especially the mountainous, rural areas of Northern Vietnam are underdeveloped. Poor and near-poor farm households endure manifold risks and income shocks, which threaten their existence. Normally, insurance systems would step in to assist. In developing countries however, where access to formal insurance services is hardly available, rural farm households have developed alternative risk management strategies. The Sustainable Livelihood Framework (SLF) of the Department for International Development (DFID 1999), was applied as an analytical tool to identify and assess risks and risk management strategies of vulnerable rural livelihoods in the Uplands of Northern Vietnam. The role of informal social networks was analyzed with the help of Social Network Analysis (SNA). An Adaptative Conjoint Analysis (ACA) was implemented to examine the potential demand for a formal or semi-formal microinsurance scheme in the area of livestock insurance. Furthermore, additional insights were gained from interdisciplinary research on issues of human, health and livelihood security, as well as from case studies on natural resource use in Southeast Asia. The central hypotheses of this research on livelihood strategies in general and adaptive strategies such as insurance in particular are that they (1) have the potential to reduce livelihood vulnerability and that (2) the differentiated knowledge of livelihood strategies is crucial for a better understanding of the reasoning behind the exploitation of livelihood assets, such as natural resources or physical assets in the form of livestock, despite the negative medium and long-term effects. Research results lead to the following conclusions: First of all, only a very elaborate use of existing capital assets can improve the livelihood situation of vulnerable households in Northern Vietnam. Living in remote mountainous regions with scarce natural resources and limited access to other assets, the preconditions are rather difficult for ethnic minority people, even more for women. Secondly, in order to improve the situation, all stakeholders have to be aware of the existing risk management strategies (e.g. raising livestock and selling it in case of a livelihood emergency is one of the most popular risk coping strategies in the mountainous regions of Northern Vietnam) and learn from both, advantages and disadvantages of currently applied strategies to translate them into effective policies. Concerning the access to financial services, people still face several constraints, as credits are often not available for certain activities or at a certain point in time. In addition, savings and insurance services, when available are not adapted to the needs. Furthermore, emerging expenditures for livelihood risks usually go beyond the scope of the dis-saving (in cash and in kind) ability of rural households. Taking into consideration the above stated situation of changing agricultural activities, including higher input use, and the resulting decline in the number of large ruminants, one should be very careful not to destroy the so far still functioning traditional social networks. Even though these networks are not able to fully buffer all shocks and crises, they are at least one asset (social capital asset) that is initially accessible by everybody and quite often a means to compensate to some degree the lack of other capital assets as depicted in the SLF. Research results point to a number of policy issues that need to be addressed if household?s vulnerability to poverty is to be significantly reduced among ethnic minority households in Northern Vietnam. First of all, poverty reduction strategies and programs need to consider a broader target group, not only the currently poor but also the vulnerable households. The promotion of innovative financial products, such as a combination of credit and insurance, especially for loans that are taken up to purchase livestock, is considered a successful approach to support vulnerable households. Finally, it is assumed that an efficient and accessible health care system would be an important alternative for securing livelihoods. In addition, im¬pro¬ved extension services and knowledge transfer for all people, especially women, could sup¬port a sustainable future development of ethnic minority households and therefore, in the long-run, lead to poverty alleviation.Trotz bereits erzielter Fortschritte aufgrund des ?doi moi? Erneuerungsprozesses, der 1986 begonnen wurde, ist Vietnam immer noch eines der ärmsten Länder der Erde. 28,9 Prozent der Gesamtbevölkerung (85 Millionen Menschen im Jahr 2007) leben unter der nationalen Armutsgrenze. Vor allem die ländlichen Bergregionen im Norden Vietnams sind unterentwickelt. Arme und bedürftige landwirtschaftliche Haushalte sind einer Vielzahl von existenzbedrohenden Risiken und Einkommensschocks ausgesetzt. Üblicherweise würden hier Versicherungen unterstützend eingreifen. Nachdem der Zugang zu formalen Versicherungen in Entwicklungsländern meist nicht vorhanden ist, haben die landwirtschaftlichen Haushalte alternative Risikostrategien entwickelt. Mit Hilfe von DFID?s Sustainable Livelihood Framework (DFID 1999), wurden die Risiken und das Risikomanagement von verletzlichen Haushalten in den Bergregionen Nordvietnams untersucht. Die Bedeutung von informellen Sozialen Netzwerken wurde mit Hilfe einer Social Network Analysis (SNA) analysiert. Eine so genannte Adaptive Conjoint Analysis (ACA) wurde eingesetzt, um die Nachfrage nach semi-formellen Mikroversicherungen für die Tierhaltung zu ermitteln. Durch interdisziplinäre Forschung im Bereich der Sicherung der Menschenrechte, der Gesundheit und der Lebensgrundlagen, sowie durch die Untersuchung von Fallstudien zur Ressourcennutzung in Südostasien konnten zusätzliche Einblicke gewonnen werden. Die zentralen Hypothesen dieses Teilprojekts, das sich mit der Erforschung von Strategien zur Sicherung der nachhaltigen Lebensgrundlage beschäftigt sind, dass (1) so genannte Anpassungsstrategien (etwa die Inanspruchnahme von Mikroversicherungen) das Potential bergen, die Gefährdung der Lebensgrundlage zu reduzieren und dass (2) das differenzierte Wissen über die verfügbaren Risikomanagementstrategien von hervorragender Bedeutung für ein besseres Verständnis der Entscheidungsprozesse ist, die hinter der Ausbeutung von Ressourcen wie z.B. den natürlichen Ressourcen, Humankapital oder der Zurückhaltung bei der Adaption von Innovationen stehen, trotz der daraus resultierenden negativen mittel- und langfristigen Effekte. Die Forschungsergebnisse führen zu den folgenden Schlussfolgerungen: Nur eine sehr ausgeklügelte Nutzung der vorhandenen Ressourcen kann die Lebensbedingungen von verletzlichen Haushalten in Nordvietnam verbessern. Die Voraussetzungen der Bewohner der abgelegenen Bergregionen sind durch die begrenzten natürlichen Ressourcen, sowie den eingeschränkten Zugang zu anderen Gütern sehr schwierig. Um die gegenwärtige Situation zu verbessern, müssen alle Beteiligten die bestehenden Risikostrategien kennen. Aus den erforschten Vor- und Nachteilen der durchgeführten Strategien können wirksame Politikempfehlungen entwickelt werden. Bezüglich des Zugangs zu Finanzdienstleistungen gibt es für die Menschen in den Bergregionen auch weiterhin viele Einschränkungen. Nach wie vor sind Kredite für bestimmte Ausgaben (z.B. Krankenhauskosten) oder zu bestimmten Zeitpunkten nicht verfügbar. Oft sind Spar- und Versicherungsangebote, falls überhaupt verfügbar, nicht den Bedürfnissen angepasst. Des Weiteren überschreiten die anfallenden Ausgaben zur Risikobewältigung oft die vorhandenen Ersparnisse der ländlichen Haushalte. Ausgehend von der in dieser Arbeit beschriebenen veränderten Situation in der Landwirtschaft, einschließlich dem höherem Einsatz von Inputs, und dem Rückgang der Nutzviehbestände, sollte darauf geachtet werden, die noch funktionierenden traditionellen sozialen Netzwerken nicht zu zerstören. Obwohl diese Netzwerke nicht in der Lage sind alle Schocks vollständig abzupuffern, zählen sie (in Form von Sozialkapital) dennoch zu den wenigen Gütern welche grundsätzlich jedem zugänglich sind. Somit besteht bis zu einem gewissen Grade die Möglichkeit einen Mangel an anderen Gütern zu kompensieren. Die vorliegenden Forschungsergebnisse machen auf eine Reihe von Sachverhalten aufmerksam, die beachtet werden sollten, wenn man die Armut der Haushalte der ethnischen Minderheiten in Nordvietnam signifikant reduzieren möchte. Erstens müssen Strategien und Programme zur Armutsbekämpfung eine größere Zielgruppe erreichen und somit nicht nur die bereits Armen, sondern auch die in ihrer Lebensgrundlage gefährdeten Haushalte ansprechen. Die Förderung innovativer Finanzdienstleistungen, beispielsweise eine Kombination von Kredit und Versicherung, vor allem für Tierkredite, wird als ein erfolgreicher Ansatz gesehen um gefährdete Haushalte zu unterstützen. Letztendlich wird davon ausgegangen, dass ein effizientes und allen zugängliches Gesundheitssystem eine wichtige Voraussetzung darstellt um die Lebensgrundlage zu sichern. Zusätzlich könnte ein verbesserter Beratungsservice und Wissenstransfer für alle, insbesondere die Frauen, zu einer nachhaltigen zukünftigen Entwicklung der Haushalte der ethnischen Minderheiten beitragen und somit im Laufe der Zeit die Armut verringern